Ethiopia:1069 Government Facilities To Be Consumer Co-ops

Re-privatization also means to consumer co-ops, and this promising step in Ethiopia may survive the unbalanced legal climate there…

The Addis Abeba City Administration is finally preparing to lose public shops and recreations centres, which had been operating under kebeles, to consumers associations within six months.

These places have been in operation since July 1976 under kebele administrations. With the fall of the Derge regime in 1991, they have been under a trustee board set by the city administration.

They include 304 kebele shops, 170 kebele recreation centres, 102 shower rooms, 71 flour mills, 16 kindergartens, 33 halls, 57 warehouses, and others, making a total of 1,069 establishments. But the city administration has not been satisfied by the quality of service provided to the public by these establishments; amongst the problems cited being the fact that they have not bought bonds for the renaissance dam.

More than half of the total, 668, including 242 shops and 16 recreational centres, are rented to third parties. In all districts but one, Gulele, these institutions keep their revenues with their trustee boards. In Gulele District, where the authorities were not comfortable with the trustee boards collecting revenues by themselves and for themselves, all revenues have been transferred to the wereda Revenue Bureau since October 2006.

These places, a study said, also followed the interests of their boards and not the public demand.

The city’s Trade & Industry Bureau, which is assigned to make the transfer to the consumers’ associations, has conducted a discussion between 15 and 17 August, 2012, with the members of the transfer committee and the trustee board as well as its staff.

The Bureau made assessments since December 2012 and offered three options to the City Council. It included letting the successful ones, such as 17-17, to continue running as usual, to sell the rest, with the revenue going to the kebeles, or to transfer the ownership to cooperatives.

The City Council issued a regulation in July 2012 to effect the transfer to the consumer associations. The thousand plus establishments to be transferred have a collective capital of 104 million Br, with fixed asset of 35.45 million Br and cash in hand and in bank of 64.85 million Br.

The 4,759 permanent employees, out of a total 5,480, will be treated according to the labour law, the regulation has indicated.

The study found problems with the management, which was controlled by a trustee board elected from the public and that the institutions did not have a uniform accounting system, according to Belayneh Woldesenbet, leader of the City’s Communication Affairs Process.

“This transfer into consumer cooperatives resolves all the challenges. They would become publicly owned, managed, controlled, and publicly responsible, accountable, and transparent institutions,” says Mulugeta Mengistu, Cooperatives Development Office head at the bureau.

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